Town Square

Vi at Palo Alto files motion to dismiss lawsuit

Original post made
on Mar 26, 2014

The Vi at Palo Alto has filed a motion to dismiss a class-action lawsuit filed by residents of the retirement community, who are alleging that the Vi's parent company, CC-Palo Alto, transferred millions of dollars in refundable entrance fees from the community to its corporate parent in Chicago.

The entire lawsuit seems like a waste of time and money. My mother was a Vi resident and after she passed away, the proper deposit money was refunded to her estate in a very timely manner with no complications or delay.

Posted by canela62
a resident of College Terrace
on Mar 26, 2014 at 11:47 am

Am glad to hear that at least one local resident (blatt) received the return of his/her mother's deposit money from Vi. My parents currently reside at Vi and I have been very concerned ever since learning about this issue. Time will tell how it will work out for them or me.

Posted by Steve
a resident of Portola Valley
on Mar 26, 2014 at 12:20 pm

When entire cities renege on promised pension benefits, and companies go bankrupt to avoid various financial obligations, it is not unreasonable for people to want more than a company assurance that it will be financially healthy enough in the future to honor these obligations. If the money is not sitting in a reserve or escrow fund, then the residents must depend on others to monitor the fiscal responsibility of Vi. Who is doing that? How is it being done? Having the company claim that they have no legal responsibility to maintain a reserve fund is not the same as providing concrete evidence that they will be able to honor these promises over the long term.

Posted by Father of 3
a resident of Midtown
on Mar 26, 2014 at 3:41 pm

The Avant is a rental only community. Rent, depending on apt size and whether single or married goes up to about 7K per month.

CCRC's, a type of retirement community of which the Vi is an example, basically repay the entry fee due to the person moving out from the entry fee the new resident has just paid to move in. The best assurance that this will happen in a timely manner is how long the waiting list is for apts. The Vi's waiting list I've heard is 3 years long. On the other hand the Vi, as opposed to non-profit communities, exists to make a profit, so it would be prudent to keep an eye on their and their parent company's financial stability and future plans. It seems reasonable to require all communities to have a cash reserve, maybe 15 or 20% earmarked for repaying entry fees in case there is a rash of moveouts or people's tastes for these kinds of communities sours and the waiting list vanishes. I would say that if you are living at the Vi now and you are in your 80's or older you should be fine.

Whether the money's in PA or Chicago -- doesn't seem to make much difference in my eyes. Either way, the money could be mishandled, lost, stolen, imprudently invested, or whatever. Just gotta hope the company is reliable and fulfills its promises ....

Posted by resident3
a resident of Crescent Park
on Mar 26, 2014 at 5:09 pm

Phil says Just gotta hope the company is reliable and fulfills its promises ....
Gee, not a day goes by that a major corporation isn't brought up on charges. And banks. That's why god invented escrow.
Lots of luck Phil. I have a bridge you may be interested in buying.

I'm pretty sure that California law requires the continuing care communities to have enough funds in reserves or escrows or whatever. It seems as if Vi and its parent are violating this law, which was set up for obvious reasons.

Posted by anonymous
a resident of another community
on Apr 23, 2014 at 9:08 pm

During my first week as an employee at a different Vi location, I raised my hand and asked what would happen if Vi went bankrupt. Would the residents still get the 50 - 90% back? Everyone shuffled in their seat uncomfortably. The answer that I got focused on the company's financial security and its record of following through with promised returns. I asked how Vi invested the residents' entrance fees but never received a solid answer.

I don't think the sales pitch explains that moving into Vi requires a huge leap of faith into the Vi brand. The company has no guarantee that it will continue to be profitable yet tells senior citizens that the entrance fee is refundable.